Litigation Valuation REPORT. Damage control Surviving a business interruption. In valuation, timing is everything. Estate wins the discount war
|
|
- Amie Walton
- 8 years ago
- Views:
Transcription
1 JULY/AUGUST 2009 & Litigation Valuation REPORT Damage control Surviving a business interruption Nonqualified deferred compensation Independent appraisals offer protection against 409A challenge In valuation, timing is everything Estate wins the discount war
2 Damage control Surviving a business interruption Cash is a business s lifeblood. Even companies that are highly profitable on paper can t survive long without a healthy cash flow. That s why a business interruption is so dangerous. Whether it s minor, such as a lightning strike that shuts down production for a day, or major, such as a lengthy labor strike, a business interruption not only reduces income, but also simultaneously creates new expenses. The key to surviving a business interruption is to restore normal operations as quickly as possible. Insurance plays a critical role. Business interruption insurance Even if an interruption is caused by another party s negligence or other wrongful conduct, most businesses don t have the luxury of waiting for a settlement or court judgment. Business interruption insurance can replace lost income and cover extraordinary expenses, such as the cost of repairing a building or replacing damaged equipment, while management focuses on getting back to business as usual. When a business interruption occurs, you should quickly establish the magnitude of the loss, review the scope of coverage under your business interruption policy to see what s covered (see Determining the scope of coverage on page 3), and put together an aggressive, but reasonable, claim. Most policies require the insured to file a detailed proof of loss within a short period (30 days, for example) after a loss occurs. Then, after a preliminary review, the insurance carrier makes an initial estimate of the loss and establishes a loss reserve. Once this reserve is set, it can be difficult to convince the carrier to accept a larger claim, so make sure you document your losses as accurately as possible. Estimating damages with a reasonable degree of accuracy in the early stages also demonstrates to the carrier that you re acting in good faith and supports requests for advance payments from the carrier a boon for your company s cash flow. Throwing out a large number just to get something on paper and then filling in the blanks later is rarely effective. Staking a claim Make sure you get financial advisors involved soon after the loss occurs. The insurance company s experts have no incentive to interpret the facts in the insured s favor, so it s up to your experts to educate the carrier about the nature of your business and the financial impact of the business interruption. Most policies reimburse the insured for some form of lost business income, but regardless of how that term is defined, there s room for interpretation. Even an insured s method of accounting can have a significant impact. If its financial statements are prepared using the cash method, for example, the carrier s first impulse might be to calculate the loss on that basis. But the insured s financial experts may be able to demonstrate that the accrual method more accurately reflects its damages. 2
3 Determining the scope of coverage Addressing scope-of-coverage issues early is critical to a successful business interruption claim. For example, does the policy cover extraordinary expenses, such as the cost of operating the business at a temporary location until the original location is restored? Does the policy cover denial of access losses? This can occur when a natural disaster or other incident causes governmental authorities to block access to your property for security reasons, even though the property isn t damaged. If you re required to rebuild your facility, what costs are reimbursed by the policy? Depending on the policy language, some courts have found that the insured should be reimbursed for the extra cost of safety enhancements or other improvements that would help avoid a similar business interruption in the future. One of the biggest challenges in putting together a business interruption claim is establishing the insured s lost income. Insurers tend to focus on a company s track record to project what its revenues would have been but for the interruption. A financial expert who s familiar with the business and its industry may be able to point to certain factors such as industry trends, market changes or companyspecific developments that indicate a higher level of growth going forward. Determining your continuing and noncontinuing costs is another critical issue. Most business interruption policies compensate the insured only for the former. In other words, to calculate recoverable lost income, you d take lost sales and then subtract noncontinuing costs. Continuing costs aren t subtracted because they re incurred despite the business interruption. Suppose, for example, that a labor strike causes a manufacturer to shut down production for a month. Variable costs which increase or decrease with the level of production would be avoided during the interruption period and, therefore, wouldn t be reimbursed. But fixed costs, such as rent and other overhead, would continue. To make the manufacturer whole, therefore, these costs shouldn t be subtracted in determining its recoverable loss. Mitigating the loss The insured s duty to mitigate its loss is an area that s ripe for controversy. Although there are many actions a company can take to limit its damages, not all of them are reasonable. For example, you might be able to reduce your company s loss by laying off salespeople or other staff. But that may not be a smart move if the business interruption is relatively short, the cost of hiring replacements when normal operations resume is high, and the loss of experienced staff would hurt your company in the long term. Make sure you address these issues early in the process, and educate the insurer about the costs and other implications of various mitigation strategies. Establishing the loss period The period of time that your business s operations are interrupted is also critical to measure. That s because you re entitled to recover business income you would have earned during that period but for the interruption. A typical definition of the loss period is the length of time that would be required with the exercise of due diligence and dispatch to rebuild, repair or replace the damaged property. Some policies provide (or have been interpreted by the courts to provide) extended coverage, allowing a business to recover losses beyond the time it takes to restore the property to its original condition. One of the biggest challenges in putting together a business interruption claim is establishing the insured s lost income. Whatever the policy s terms, a financial expert with relevant business experience can help you estimate and document an appropriate loss period. Assessing the damage To survive a business interruption, you need to move quickly to estimate the losses and put together a persuasive, well-documented insurance claim. Because this requires you to establish the business s lost income and extra expenses during the interruption period, the assistance of financial experts with experience calculating lost profits damages can be invaluable. u 3
4 Nonqualified deferred compensation Independent appraisals offer protection against 409A challenge Businesses that provide employees with stock options, stock appreciation rights (SARs) and other types of nonqualified deferred compensation have been subject to Internal Revenue Code (IRC) Section 409A for years. As you can imagine, compliance is particularly challenging in the current economic environment. To avoid Sec. 409A problems, options and SARs must be issued at or above fair market value (FMV), so accurate valuations are critical. The best way for privately held companies to protect themselves now is to have regular, independent stock appraisals by a qualified valuation expert. What Sec. 409A requires Sec. 409A was designed to help discourage certain types of compensation arrangements that give executives too much control over the form and timing of benefits. It applies to most deferred compensation arrangements other than qualified retirement plans. Failure to comply results in immediate taxation of vested benefits plus a 20% excise tax and interest. Sec. 409A was designed to help discourage certain types of compensation arrangements that give executives too much control over the form and timing of benefits. Sec. 409A and the regulations that accompany it are complex, and a detailed discussion is beyond the scope of this publication. But, generally, it requires deferral elections to be made well in advance and imposes strict limits on an employee s ability to alter the form or timing of deferred compensation payments. The rules don t present a significant problem for supplemental executive retirement plans (SERPs) or other nonqualified deferred compensation plans that contemplate payments on a specified date or according to a fixed schedule. But they do defeat the purpose of stock options and SARs, whose value lies in an employee s ability to choose the optimal time to exercise them. Fortunately, the regulations provide an exception for options or SARs that have: 1) an exercise price that can never be less than the stock s FMV on the grant date, and 2) no other feature for deferring compensation. Establishing fair market value The regulations permit a company to determine FMV through reasonable application of a reasonable valuation method. A reasonable valuation method should consider the following factors, as applicable: u The value of the company s tangible and intangible assets, u The present value of anticipated future cash flows, u Stock prices of comparable public companies, u Recent arm s-length sales prices of comparable private companies, u Other relevant factors, such as control premiums and discounts for lack of marketability, and u The valuation method s use for other material purposes. A valuation method is not reasonable if it fails to consider all available information that s material to the company s value, including a previously calculated 4
5 requirements. Given these restrictions, this method won t be an option for most private companies. 2. Under the illiquid startup method, a valuation of stock in a privately held company that s less than 10 years old is presumed reasonable if it meets several requirements. It must be performed by a person who s qualified based on significant knowledge, experience, education or training. In addition, the valuation must be documented by a written report that considers the valuation factors set forth in the regulations; the stock must not be subject to any put or call rights (with certain exceptions); and the company must not reasonably anticipate a sale, initial public offering or change in control within 12 months after the grant date. The illiquid startup method may be less costly than an independent appraisal, especially if it s performed in-house, but it s also riskier. There are many uncertainties that make valuations vulnerable to IRS attack. The IRS may be more likely to challenge an employee s qualifications or methods. And it may be difficult to rebut a claim that the company anticipated a sale or IPO. value that fails to reflect material information available after the calculation date. Moreover, valuations performed within 12 months before the grant date are presumed to be reasonable. 3 presumptive valuation methods To provide some peace of mind, Sec. 409A outlines three presumptive valuation methods. Using these methods is presumed to be reasonable unless the IRS can show that the method or its application was grossly unreasonable. 1. The formula method allows a company to set exercise prices according to a formula based on book value, earnings multiples or some combination of the two, provided the formula is used consistently to value the company s stock for certain compensatory and noncompensatory purposes and meets certain other 3. Independent valuations are presumed reasonable if they re performed within 12 months before the grant date (unless subsequent events have a material impact on value). So long as the appraiser is qualified and his or her valuation methods aren t grossly unreasonable, it s difficult for the IRS to mount a successful challenge under Sec. 409A. Noncompliance isn t an option Companies that use stock options or SARs as part of their compensation programs should pay close attention to valuation issues. Awards with a below-fmv exercise price, or which otherwise violate Sec. 409A, can quickly erase the benefits these programs are designed to confer. The most effective way for a privately held company to comply with Sec. 409A is to obtain independent appraisals of its stock within 12 months before each grant date and after any significant events that have a material impact on stock values. u 5
6 In valuation, timing is everything The primary focus in valuation is how much but when comes in a close second. The valuation date can have an enormous impact on value, particularly for assets such as stock, whose valuations can fluctuate dramatically, literally overnight. Here are a few examples of situations in which the valuation date comes into play. Estate planning For estate tax purposes, assets are normally valued on the date of death. But under certain circumstances, an executor may elect to use the alternate valuation date, which is six months after the date of death. The later date may be advantageous if the decedent s estate includes securities, real estate or other property that s declined substantially in value since the date of death. There s a catch, though. The executor can t selectively apply the election to assets whose values have declined sharply. Rather, if the alternate valuation date is selected, it must be used for all assets in the estate (except for those sold between the date of death and the alternate valuation date, which are valued on the sale date). Divorce For purposes of divorce, the valuation date is usually prescribed by state law. Typically, it s the date the divorce action was commenced, but it could also be the trial date, the date a divorce decree is issued or some other date established by law or by agreement of the parties. In some states, the court may select a valuation date that would be fair to both parties. In most cases, however, it s up to the attorney to decide which valuation date should be used. litigation. But it s not unusual for the parties to argue for an alternate valuation date if they feel that using the presumptive date would be unfair. Circumstances that might call for an alternate date include: 1. The unavailability of sufficient market information on the presumptive valuation date, 2. The existence of a contingency or potential liability that wasn t yet resolved on the presumptive date, 3. An aberration that temporarily increased or decreased the stock s value around the time of the corporation s wrongful act, or 4. Evidence that the corporation s wrongful act was timed to take advantage of an historically high or low stock price. To ensure the best possible valuation outcome, you and your valuation experts should discuss the valuation date. In cases where the date is a litigated issue, you should be prepared to address the appropriate date and present evidence of value on various dates. u 6 Shareholder litigation In shareholder oppression cases, applicable law often provides that the presumptive valuation date is immediately before the wrongful act that triggered the
7 Estate wins the discount war In Estate of Litchfield v. Commissioner, the Tax Court generally accepted the estate s proposed valuation discounts because the estate s expert s methods were more precise and relied on more recent, company-specific data. Discounts debated The case involved the valuation of minority interests in two family-owned corporations: Litchfield Realty Co. (LRC) and Litchfield Securities Co. (LSC). LRC invested in and managed Iowa farmland, marketable securities and other property with substantial built-in (that is, unrealized) capital gains. LRC was originally formed as a C corporation but converted to an S corporation on Jan. 1, S corporations generally pay no corporate-level taxes. But under IRC Section 1374, preconversion assets sold before Jan. 1, 2010, remain subject to corporate-level tax on built-in gains existing on the conversion date. LSC was a C corporation that invested in marketable securities and also had substantial built-in capital gains. Valuation experts on both sides used the net asset value (NAV) method to determine the fair market value of the estate s interests in LRC and LSC. They also agreed that valuation discounts were appropriate to reflect built-in capital gains tax liability, lack of control and lack of marketability. They differed, however, on the size of those discounts. The chart at top right shows the discounts proposed by the parties and those accepted by the court. The court accepted the estate s expert s discounts for built-in capital gains largely because the expert relied on more current, company-specific information, including anticipated sales of corporate assets. The expert relied on historical data, recent data and conversations with management. The IRS expert relied solely on historical asset sales. For each company, the estate s expert projected holding periods and sale dates for appreciated assets, estimated appreciation for those assets and the resulting capital gains taxes, discounted the tax liability to present value and subtracted that figure from the company s NAV. Proposed discounts in Litchfield case Discount Estate IRS Court LRC LSC Built-in gain 17.4% 2.0% 17.4% Lack of control 14.8% 10.0% 14.8% Lack of marketability 36.0% 18.0% 25.0% Built-in gain 23.6% 8.0% 23.6% Lack of control 11.9% 5.0% 11.9% Lack of marketability 29.7% 10.0% 20.0% The court also preferred the estate s expert s discounts for lack of control. With regard to LRC, the two experts used methods that were similar in many respects. But the estate s expert calculated separate discounts for real estate and securities and used a weighted average of the two, while the IRS s expert used a straight average. With regard to LSC, the IRS s expert used the same 5% discount for its marketable securities that he applied to the marketable securities portion of LRC s holdings, even though the estate s interest in LSC was much smaller. The court found that the estate s expert correctly applied a higher control discount to LSC s securities holdings. Although the court agreed with the estate s expert s methods for calculating marketability discounts, it adjusted them downward because it felt they were too high compared to benchmark studies, and they relied on outdated data relating to restricted stock discounts. In addition, the discounts were higher than those the same expert had used a year earlier in valuing the interest in LSC for federal gift tax purposes. What can be learned? The Litchfield case highlights the need not only for retaining qualified valuation experts, but also for using the most precise methods and the most current data available for the particular situation. u This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use VLBja09 7
STRAIGHT TALK ABOUT CORPORATE/SECURITIES LAW
STRAIGHT TALK ABOUT CORPORATE/SECURITIES LAW Private Company Stock Option Pricing in the 409A Era Section 409A of the Internal Revenue Code, along with recent changes in financial accounting rules and
More informationStock Valuation and Stock Pricing Alternatives Ronald J. Adams, CPA Managing Director Newbury Piret & Co.
Stock Valuation and Stock Pricing Alternatives Ronald J. Adams, CPA Managing Director Newbury Piret & Co. Publicly traded companies, venture capital firms, and private equity firms are now dealing with
More informationApril 2009. Special rules apply to the grant of NSOs to purchase Preferred Stock.
April 2009 Background Section 409A of the Internal Revenue Code, enacted on October 22, 2004, was intended to reduce the ability of participants in nonqualified deferred compensation plans to control at
More informationRestricted stock: the tax impact on employers and employees. G. Edgar Adkins, Jr., and Jeffrey A. Martin
Restricted stock: the tax impact on employers and employees G. Edgar Adkins, Jr., and Jeffrey A. Martin Restricted stock: the tax impact on employers and employees 2 Restricted stock is growing in popularity
More informationEQUITY INCENTIVES IN EMERGING GROWTH COMPANIES. Amit Singh, Esq. Tech Coast Angels. Copyright 2010 Benchmark Law Group PC
EQUITY INCENTIVES IN EMERGING GROWTH COMPANIES By Amit Singh, Esq. Presented to Tech Coast Angels Stock Options Restricted Stock FF Stock RATIONALE FOR EQUITY 3 INCENTIVES Align the interests of Employees
More informationAdvocate sedge. Weak buy-sell agreement leads to lengthy litigation Have faith Trusting fraud experts with your fidelity insurance claims
Advocate sedge Weak buy-sell agreement leads to lengthy litigation Have faith Trusting fraud experts with your fidelity insurance claims Valuing a professional practice Court prefers excess earnings method
More informationClient Alert. An informational newsletter from Goodwin Procter LLP. Final Section 409A Regulations and Equity Compensation Arrangements
May 3, 2007 Client Alert An informational newsletter from Goodwin Procter LLP Final Section 409A Regulations and Equity Compensation Arrangements Highlights of Final Regulations The IRS recently published
More informationMost venture-backed companies do not have
Structuring Stock Options and Severance Payments after Section 409A: Practical Advice for Venture-backed Companies BY A. WILLIAM CAPORIZZO AND KIMBERLY B. WETHLY WITH SPECIAL THANKS TO EDWARD YOUNG Most
More informationConsiderations of the Built-In Gain (BIG) Tax Liability Discount During the S Corporation Conversion Recognition Period
Forensic Analysis Insights Income Tax Considerations of the Built-In Gain (BIG) Tax Liability Discount During the S Corporation Conversion Recognition Period Fady F. Bebawy In performing a valuation analysis
More informationGolden parachute payments
Golden parachute payments Understanding how stock options and restricted stock can cost both corporations and executives during a merger or acquisition Jeffrey A. Martin Golden parachute payments 2 Corporations
More informationPrivate Company Stock Options: Determining Fair Market Value in Light of Section 409A of the Internal Revenue Code
Private Company Stock Options: Determining Fair Market Value in Light of Section 409A of the Internal Revenue Code Mark Bettencourt Ken Gordon Marian Tse Scott Webster March 2, 2006 2006. Goodwin Procter
More informationBusiness Succession Planning
Business Succession Planning with Key Person Coverage and Buy-Sell Agreements Program Highlights & Fact Finder You put maximum effort into establishing and running your business. But are you taking the
More informationBY: GERALD BARNEY, MS, AVA, CFFA, CSBA, CMEA MELISA SILVERMAN, JD, AVA, SBA, CMEA
EMPLOYEE STOCK INCENTIVE PROGRAMS AND IRC 409A COMPLIANCE BY: GERALD BARNEY, MS, AVA, CFFA, CSBA, CMEA MELISA SILVERMAN, JD, AVA, SBA, CMEA American ValueMetrics Corp 2011 2013 Page 1 of 9 BACKGROUND The
More informationEstate Planning. Farm Credit East, ACA Stephen Makarevich
Estate Planning Farm Credit East, ACA Stephen Makarevich Farm Business Consultant 9 County Road 618 Lebanon, NJ 08833 1.800.787.3276 stephen.makarevich@farmcrediteast.com 1 What is Estate Planning? 2 Estate
More informationBusiness Su c c e s s i o n Pl a n n i n g
Business Su c c e s s i o n Pl a n n i n g w i t h Key Pe r s o n Co v e r a g e and Buy-Sell Agreements Program Highlights & Fact Finder You put maximum effort into establishing and running your business.
More informationValuation of S-Corporations
Valuation of S-Corporations Prepared by: Presented by: Hugh H. Woodside, ASA, CFA Empire Valuation Consultants, LLC 777 Canal View Blvd., Suite 200 Rochester, NY 14623 Phone: (585) 475-9260 Fax: (585)
More informationIncentive Stock Options
JPH Advisory Group Curtis Hearn, CFP 600 Galleria Pkwy Ste 1600 Atlanta, GA 30339 770-859-0076 curtis@jphadvisory.com www.jphadvisory.com Incentive Stock Options Page 1 of 6, see disclaimer on final page
More informationGETTING (BACK TO) BUSINESS INTERRUPTION INSURANCE. Section 1: Lost property and lost earnings are treated separately
GETTING (BACK TO) BUSINESS INTERRUPTION INSURANCE Section 1: Lost property and lost earnings are treated separately Business interruption insurance (also known as business income protection, profit protection,
More informationTRENDS IN BANK EXECUTIVE/DIRECTOR COMPENSATION AND BENEFITS
Bill Enck, CPA, CPC, APA Employee Benefits Consulting Group TRENDS IN BANK EXECUTIVE/DIRECTOR COMPENSATION AND BENEFITS berrydunn.com TYPES OF EXECUTIVE COMPENSATION Stock Options Synthetic equity Nonqualified
More informationAn Overview of Business Insurance Copyright 2015 RegEd Inc. 2100 Gateway Centre Blvd. Suite 200
An Overview of Business Insurance Copyright 2015 RegEd Inc. 2100 Gateway Centre Blvd. Suite 200 Morrisville, NC 27560 800-334-8322 email: info@reged.com All rights reserved. No portion may be reproduced
More information{What s it worth?} in privately owned companies. Valuation of equity compensation. Restricted Stock, Stock Options, Phantom Shares, and
plantemoran.com {What s it worth?} Valuation of equity compensation in privately owned companies Restricted Stock, Stock Options, Phantom Shares, and Other Forms of Equity Compensation The valuation of
More informationWhat is an ESOP? ESOPs are defined contribution pension plans that invest primarily in the stock of the plan sponsor
Employee Stock Ownership Plans May 2013 http://aicpa.org/ebpaqc ebpaqc@aicpa.org Topix Primer Series The AICPA Employee Benefit Plan Audit Quality Center (EBPAQC) has developed this primer to provide Center
More informationTransferring Your Business Interest with a Buy-Sell Agreement
Besselman & Associates Patricia Ann Besselman CFP James M. Besselman, CLU, ChFC 111 Veterans Blvd. Ste. 360 Metairie, LA 70005 504-831-3506 pbesselman@besselmanandassoc.com Transferring Your Business Interest
More informationFrequently Asked Questions (Including Definitions)
My Business Income Consultation from Chubb Frequently Asked Questions (Including Definitions) Frequently Asked Questions How To Use The Tool Click on the question that you would like to have answered.
More informationInsight on estate planning
Insight on estate planning june.july.2004 Irrevocable life insurance trusts 5 things you need to know about to save taxes Should a trust be the beneficiary of your retirement plan? Providing estate plan
More informationGuide to Commercial Insurance
Guide to Commercial Insurance Introduction Operating a successful business today requires knowledge in many different areas, and one of the most important things to consider are the types and amounts of
More informationPROTECTING BUSINESS OWNERS AND PRESERVING BUSINESSES FOR FUTURE GENERATIONS
BASICS OF BUY-SELL PLANNING A buy-sell arrangement (or business continuation agreement ) is an arrangement for the disposition of a business interest upon a specific triggering event such as a business
More information$2,000 (premium) multiplied by 6 months (period remaining), divided by 12 months (number of months premium covers), or
client who has a personally owned life insurance policy comes to you. You convince her to either sell or gift the policy to an irrevocable life insurance trust (ILIT). You need to get the value of the
More informationEquity Compensation in Limited Liability Companies
Equity Compensation in Limited Liability Companies October 6, 2010 Presented by: Pamela A. Grinter Frank C. Woodruff Introduction to Limited Liability Companies Limited liability companies were created
More informationTrust & Estate Insights
A UBS Private Wealth Management Newsletter Advanced Planning January 2014 Trust & Estate Insights Key takeaways When understanding stock options and equity compensation, be sure to speak the "language."
More informationstock options, restricted stock and deferred compensation
stock options, restricted stock and deferred compensation Stock options, restricted stock, and other types of deferred compensation continue to be included by many employers as part of the overall benefits
More informationAMENDMENT TO YOUR TRADITIONAL IRA
INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE STATEMENT AMENDMENT This disclosure statement explains the rules governing a Traditional IRA. The term IRA will be used in this disclosure statement to refer to
More informationContents. Introduction
Contents xv Introduction Over 14 million American workers now receive employee stock options, an increase from one million in 1990. 1 Further, 79% of stock option holders earn less than $75,000 annually.
More informationRoth IRA Disclosure Statement
Roth IRA Disclosure Statement RIGHT TO REVOKE YOUR ROTH IRA You have the right to revoke your Roth IRA within seven days of the receipt of the disclosure statement If revoked, you are entitled to a full
More informationMemorandum. Office of Chief Counsel Internal Revenue Service. Number: 200803016 Release Date: 1/18/2008 CC:PA:B03: POSTS-100069-07 UILC: 6324A.
Office of Chief Counsel Internal Revenue Service Memorandum Number: 200803016 Release Date: 1/18/2008 CC:PA:B03: UILC: 6324A.00-00 date: October 11, 2007 to: Mary P. Hamilton Senior Attorney (Boston) (Small
More informationIncentive Stock Options
Raymond James The Tyson Smith Group Tyson Smith Vice President 301 E. Pine Street Suite 1100 Orlando, FL 32801 407-648-4488 800-426-7449 tyson.smith@raymondjames.com www.thetysonsmithgroup.com Incentive
More informationRaising Money, Issuing Shares and Distributing Assets
SECTION 7 Raising Money, Issuing Shares and Distributing Assets A. Financing the Corporation One of the most important roles of the board of directors is to authorize financing of the corporation to meet
More informationCynk Technology Corp. (A Development Stage Company) (formerly Introbuzz) Balance Sheets
Cynk Technology Corp. (A Development Stage Company) (formerly Introbuzz) Balance Sheets ASSETS March 31, December 2014 31, 2013 ------- --------- Current Assets Cash and cash equivalents $ 39 $ 39 --------
More informationThe. Estate Planner. Do you have a liquidity plan? Being elastic can be fantastic. A blended family requires smart estate planning
The Estate Planner January/February 2010 Do you have a liquidity plan? Being elastic can be fantastic Stretch your retirement savings for yourself and your heirs A blended family requires smart estate
More informationSample Corporate Cross Purchase Agreement
Sample Corporate Cross Purchase Agreement (Optional Disability Buy-Out) This sample agreement has been prepared as a guide to assist attorneys. Our publication, Buy-Sell Arrangements, A Guide for Professional
More informationImportant Information about your Annuity
Robert W. Baird & Co. Incorporated Important Information about your Annuity Annuities are long-term investments that may help you meet or supplement your retirement and other long-term goals. Annuities
More informationTen Tips to Securing Insurance Coverage for a Business Interruption
Ten Tips to Securing Insurance Coverage for a Business Interruption Lee M. Epstein Copyright 2013 Flaster/Greenberg PC (adapted from Fried & Epstein, LLP 1999 editorial) INTRODUCTION In the aftermath of
More informationA QUESTION-AND-ANSWER GUIDE TO CODE SECTION 409A
A QUESTION-AND-ANSWER GUIDE TO CODE SECTION 409A Section 409A created new requirements for nonqualified deferred compensation and imposes penalties on arrangements that do not comply with these requirements.
More informationIMPACT. July/August 2014. It s time for midyear tax planning Timely tips to help keep your tax bill low. How to make the most of life insurance
tax July/August 2014 IMPACT It s time for midyear tax planning Timely tips to help keep your tax bill low How to make the most of life insurance Buying or selling a business? Here s what you need to know
More informationEducational Series. Supplemental Executive Retirement Plan (SERP)
Supplemental Executive Retirement Plan (SERP) Supplemental Executive Retirement Plans (SERP) Guide What is a Supplemental Executive Retirement Plan (SERP)? A supplemental executive retirement plan is a
More informationValuing S Corporation ESOP Companies
CHAPTER FOUR Valuing S Corporation ESOP Companies Kathryn F. Aschwald Donna J. Walker n January 1, 1998, corporations with employee stock ownership plans (ESOPs) became eligible to O elect S corporation
More informationAnnuities. Fixed Annuity: An annuity which the amount paid out is fixed sum and is usually guaranteed.
Annuities Fixed Annuity: An annuity which the amount paid out is fixed sum and is usually guaranteed. Loads: The fees or charges paid when you purchase an annuity. Includes sales commissions. Author: Douglas
More informationWhat s News in Tax Analysis That Matters from Washington National Tax
What s News in Tax Analysis That Matters from Washington National Tax Stock Option Compensation Warnings for the Unwary Stock options are a popular form of compensation provided to employees of corporations.
More informationROTH INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
ROTH INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT Form 5305- RB under Section 408A of the Internal Revenue Code This endorsement is made a part of the annuity contract to which it is attached, and the following
More informationDistributions and Rollovers from
Page 1 of 6 Frequently Asked Questions about Distributions and Rollovers from Retirement Accounts Choosing what to do with your retirement savings is an important decision. Tax implications are just one
More informationThe Income Taxation of Employment Split Dollar Loan Arrangements Split Dollar Loan Arrangements
The Income Taxation of Employment Split Dollar Loan Arrangements Split Dollar Loan Arrangements These materials are not intended to be used to avoid tax penalties and were prepared to support the promotion
More informationLife Insurance Producer s Guide. Executive Bonus. Using Life Insurance. For Life Insurance Producer Use Only. Not for Use with the Public.
Life Insurance Producer s Guide Executive Bonus Using Life Insurance AD-OC-838A For Life Insurance Producer Use Only. Not for Use with the Public. Insurance products are issued by Pacific Life Insurance
More informationLife Insurance: Business Applications
Life Insurance: Business Applications What is business life insurance? Life insurance is an important part of a business. It may be used as a funding mechanism for your buy-sell agreement and as business
More informationAlternative Approaches to Executive Compensation
Alternative Approaches to Executive Compensation 2014 New England Chapter Annual Conference October 3, 2014 Bill Enck, CPA, CPC, APA BerryDunn Joseph E. Marx, CPA Principal Financial Group Today s Agenda
More informationEquity Compensation: Key Issues for Start-Up Companies
Equity Compensation: Key Issues for Start-Up Companies Jeff Solomon Partner, Katz, Nannis + Solomon, PC Kim Wethly Partner, Josh Fox Partner, #WHQuickLaunchU Attorney Advertising Equity Issuances Generally
More informationNon-Qualifi ed Fringe Benefi t Planning
Employee benefi t packages are increasingly viewed as an important form of compensation. The right mix of salary and other benefits can attract, and keep, top-quality employees. Non-Qualifi ed Fringe Benefi
More informationEP Asia Small Companies Fund EP Latin America Fund EP China Fund Each a series of Investment Managers Series Trust
EP Asia Small Companies Fund EP Latin America Fund EP China Fund Each a series of Investment Managers Series Trust Supplement dated June 30, 2015, to the Summary Prospectus dated March 5, 2015, and the
More informationRegulations under Section 457(b) of the Code define an unforeseeable emergency as a severe financial hardship resulting from:
Section 457(b) Plan Administrator s Guide To Unforeseeable Emergency Withdrawals By: Gay Lynn Bath, Deferred Compensation Manger of the Oregon Savings Growth Plan and Roderick Crane, Director of Institutional
More informationFact Finder for Small Business
Fact Finder for Small Business A. Company Background Company Name: How did you get started in your business? When did you establish your business? What makes your business unique? How is your business
More informationFinal Nonqualified Deferred Compensation (409A) Regulations -- Focus on SERPs
April 18, 2007 By John Lowell, Vice President, Aon Consulting On April 10, 2007, Treasury released final regulations under Internal Revenue Code (IRC) Section 409A, relating to the taxation of nonqualified
More informationShared Dollar Life Insurance: Insuring Adult Children to Build Retirement Funds
Shared Dollar Life Insurance: Insuring Adult Children to Build Retirement Funds What Will Retirement Look Like for Our Children? If you are like most working people, from time to time you think about retiring.
More informationFrequently asked questions
Page 1 of 6 Frequently asked questions Distributions and rollovers from retirement accounts Choosing what to do with your retirement savings is an important decision. Tax implications are just one of several
More informationInsurance-Related Best Practices Guide for Buy-Sell Agreements
Insurance-Related Best Practices Guide for Buy-Sell Agreements The buy-sell agreement review and feedback process at the Principal Financial Group has allowed us to observe many different drafting approaches
More informationMany individuals are involved in operating
ERISA fiduciaries: A case law update Many individuals are involved in operating a qualified plan. Some are considered fiduciaries and others act under the direction of a fiduciary. This is an important
More informationBuy-Sell Planning. Succession Planning for Business Owners. Guiding you through life. SALES STRATEGY BUSINESS. Advanced Markets. Situation.
Guiding you through life. SALES STRATEGY BUSINESS Buy-Sell Planning Succession Planning for Owners Situation owners should plan to protect their business in case of the sudden death, retirement, or disability
More informationTRADITIONAL IRA AMENDMENT
TRADITIONAL IRA AMENDMENT AMENDMENT TO YOUR IRA This Disclosure Statement and Individual Retirement Trust Account Agreement updates your individual retirement account (IRA) documents that we previously
More informationComprehensive Split Dollar
Advanced Markets Client Guide Comprehensive Split Dollar Crafting a plan to meet your needs. John Hancock Life Insurance Company (U.S.A.) (John Hancock) John Hancock Life Insurance Company New York (John
More informationReal Estate advisor. Protecting your income with business interruption insurance. March April 2012. Ask the Advisor. A loan primer
Real Estate advisor March April 2012 Protecting your income with business interruption insurance A loan primer It pays to know the rules SMLLCs: The good, the bad and the ugly Ask the Advisor How can I
More informationVIRGINIA ACTS OF ASSEMBLY -- 2015 SESSION
VIRGINIA ACTS OF ASSEMBLY -- 2015 SESSION CHAPTER 585 An Act to amend and reenact 38.2-2206 of the Code of Virginia and to amend the Code of Virginia by adding in Article 7 of Chapter 3 of Title 8.01 a
More informationManaging Employer Fiduciary Issues for 401k and 403b Plan Sponsors in 2013
Managing Employer Fiduciary Issues for 401k and 403b Plan Sponsors in 2013 Questions and Answers from Verisight s Presentation, January 30 th, 2013 What is the difference between a qualified plan and a
More informationThe Business Organization: Choosing an Entity
The Business Organization: Choosing an Entity The subject matter is divided into two sections: 1. Section A shows direct comparison of different types of organizational structures. 2. Section B details
More informationMARCH/APRIL 2015 MAKING THE MOST OF DIVIDEND INCOME WHICH TYPE OF MORTGAGE LOAN MEETS YOUR NEEDS?
PLANNING FOR PROSPERITY MARCH/APRIL 2015 MAKING THE MOST OF DIVIDEND INCOME REVIEW IN CASE OF DIVORCE When it s critical to revise your estate plan WHICH TYPE OF MORTGAGE LOAN MEETS YOUR NEEDS? FOREIGN
More informationMake your estate more liquid with life insurance
Make your estate more liquid with life insurance A/R management It s a common financial plumbing problem The state of estate planning Like-kind exchanges at a glance Deferring taxes by swapping real estate
More informationA GUIDE TO EXECUTIVE DEFERRED. An Employer s Quandry: How do we get more Deferred Compensation to Executives? Qualified Plans
An Employer s Quandry: How do we get more Deferred Compensation to Executives? A GUIDE TO EXECUTIVE DEFERRED COMPENSATION In business, it is often difficult enough to determine what salaries and short
More informationThe Competitive Edge. Attract, retain and reward top performers in your corporation. Executive Compensation Strategies That Use Life Insurance
The Competitive Edge Attract, retain and reward top performers in your corporation Executive Compensation Strategies That Use Life Insurance AD-OC-678C 1 This material is not intended to be used, nor can
More informationNonqualified Deferred C ompensation P lans. Prepared by Sentinel Benefits & Financial Group October 13, 2014
Nonqualified Deferred C ompensation P lans Prepared by Sentinel Benefits & Financial Group October 13, 2014 2 Nonqualified Deferred Compensation Plans WHAT IS IT? A nonqualified deferred compensation (NQDC)
More informationRowbotham & Company Memorandum
Rowbotham & Company Memorandum To: Executive, XYZ Software RE: Stock Incentives From: Rowbotham & Company LLP Date: November 15, 1999 This memorandum compares the federal tax treatment of four types of
More informationTax Free Transfer of IRA to Divide Marital Property Revisited: Separation Agreement Must Be Incident To Decree of Divorce
In the October 2007 issue of Family Law News we published an article which reviewed the circumstances under which an Individual Retirement Account might be divided. We now provide you with the following
More informationPERSONAL INCOME TAX BULLETIN 2005-03
PERSONAL INCOME TAX BULLETIN 2005-03 Issued: October 12, 2005 First Revision: December 22, 2005 Second Revision: September 08, 2006 Deferred Compensation Under Nonqualified Plans Part I. Overview. (a)
More informationLife Insurance: A Multi-Purpose Wealth Management Tool
Life Insurance: A Multi-Purpose Wealth Management Tool These materials are not intended to be used to avoid tax penalties and were prepared to support the promotion or marketing of the matter addressed
More informationPassing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance
Passing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance Passing On The Good Stuff! All inheritances aren t equal. Even two different assets that are worth similar amounts may
More informationIMPACT. May/June 2014. Capturing the benefits of captive insurance. How defined-value gifts can help limit your tax exposure
tax May/June 2014 IMPACT Capturing the benefits of captive insurance How defined-value gifts can help limit your tax exposure Undisclosed foreign accounts: Handle with care Tax Tips Hire your kids to save
More informationCommunity Banking. Cross-collateralization: Handle with care. A D V I S O R Summer 2012. Managing outsourcing risks. How to carry a millionaire
Community Banking A D V I S O R Summer 2012 Managing outsourcing risks Wealth management programs How to carry a millionaire Bank Wire Cross-collateralization: Handle with care Cross-collateralization:
More informationThe problem of cheap options. The implications of IRC 409A for startups and VCs: What you need to know
The problem of cheap options The implications of IRC 409A for startups and VCs: What you need to know Contact Information and Disclaimer Sanjay Gandhi, President T: 212 464 7178 E: sgandhi@oxfordvp.com
More informationBMA ADVISORS, LLC Investment Advisory Agreement
BMA ADVISORS, LLC Investment Advisory Agreement 608 Silver Spur Road, Suite 100, Rolling Hills Estates, CA 90274 This agreement describes the relationship between BMA Advisors, LLC (hereinafter BMA ) and
More informationLife Insurance as an Asset Class: A Predictable Asset for Unpredictable Times
Life Insurance as an Asset Class: A Predictable Asset for Unpredictable Times This material is not intended to be used to avoid tax penalties. It was prepared to support the promotion or marketing of the
More informationTax Rates. For personal income tax purposes, for tax years beginning after 2014, the tax rates are as follows:
October 2014 District of Columbia Reduced Tax Rates, Single Sales Factor, Other Changes Adopted Permanent District of Columbia budget legislation makes numerous significant changes to the corporation franchise
More informationNonqualified Deferred Compensation Plans Why Administration Matters
Nonqualified Deferred Compensation Plans Why Administration Matters By: Howard D. Stern, FSA Vice President & Actuary The Pangburn Company HOWARD D. STERN, FSA is Vice President and Actuary with the Pangburn
More informationThe. Estate Planner. Is your estate plan flexible? Estate tax law uncertainty requires options. No time like the present
The Estate Planner July/August 2012 Is your estate plan flexible? Estate tax law uncertainty requires options No time like the present With favorable estate tax and real estate environments, use a QPRT
More informationLife Insurance Education Series
Advanced Planning Life Insurance Education Series Part 5: Life insurance planning for businesses Changes in income- and estate-tax laws as well as volatility in the market may require you to review your
More informationConsidering Alternatives to Liquidation
August, 2015 Considering Alternatives to Liquidation KNAV is a firm of International Accountants, Tax and Business Advisors. Presence in INDIA USA UK FRANCE NETHERLANDS SWITZERLAND CANADA E: admin@knavcpa.com
More informationTEXAS GENERAL DURABLE POWER OF ATTORNEY THE POWERS YOU GRANT BELOW ARE EFFECTIVE EVEN IF YOU BECOME DISABLED OR INCOMPETENT
TEXAS GENERAL DURABLE POWER OF ATTORNEY THE POWERS YOU GRANT BELOW ARE EFFECTIVE EVEN IF YOU BECOME DISABLED OR INCOMPETENT NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING. THEY ARE
More informationKeystone Financial Planning, Inc.
Keystone Financial Planning, Inc. 7261 Engle Road Suite 308 Middleburg Heights, Ohio 44130 Telephone: 440.234.6323 Facsimile: 440.234.6844 Website: www.keystonefin.com February 10, 2014 FORM ADV PART 2
More informationRidgefield Library Gift Acceptance Policy
Ridgefield Library Purpose The purpose of this ( this Policy ) is to give guidance and counsel to those individuals within the Ridgefield Library ( the Library ) concerned with the planning, promotion,
More informationemployee benefits update february/march 2013
employee benefits update february/march 2013 It s time to reap the benefits of matching contributions Can you define compensation? A review of IRS definitions that affect qualified plans Offsetting stagnant
More informationYOUR PENSION BENEFITS BOOK. This U.S. Benefits Book describes the Pension Plans effective Jan. 1, 2013.
YOUR PENSION BENEFITS BOOK This U.S. Benefits Book describes the Pension Plans effective Jan. 1, 2013. About this document This Summary Plan Description (SPD) provides general information regarding benefit
More informationOur Value Proposition
Our Value Proposition Today s regulatory environment is tougher than ever. In the past, hedge fund managers could use mark-to-model values for illiquid assets or simply place them in a side pocket. Executives
More informationCoordinating Corporate Dollars
Coordinating Corporate Dollars A review of various ways you can use your corporate dollars to attract, retain and reward key personnel, to help meet your goals of business continuity and tax efficiency.
More informationNumerous Recent Law and Accounting Changes Affect Stock Options
Numerous Recent Law and Accounting Changes Affect Stock Options Stock option plans have been significantly impacted by recent changes in the law, including final regulations on incentive stock options
More informationTaxes are still certain: individual tax consequences under Sarbanes Oxley
Journal of Finance and Accountancy Taxes are still certain: individual tax consequences under Sarbanes Oxley ABSTRACT Kathryn A. Hansen California State University Los Angeles Edward L. Monsour California
More information